Reynolds wins Graham Packaging battle

SaraSjølin

New York (MarketWatch) — Reynolds Group Holdings Ltd. said Friday that is has entered into a definitive merger agreement with Graham Packaging Co. Inc. in a $1.7 billion acquisition.

Reynolds Group offered Tuesday to buy Graham Packaging
GRM, +0.64%
for $25 a share in cash, entering a bidding competition with Stamford, Conn.-based Silgan Holdings Inc.
SLGN, -0.26%
The offer beat out an existing deal with Silgan of $19.56 a share in cash, and Silgan had three days to match the offer. Silgan said Friday morning that it would not raise its offer and ended the merger agreement.

Silgan struck the deal with Graham Packaging in April and was set to purchase the firm until the agreement with Reynolds Group was recommended by Graham Packaging’s board of directors. As part of Reynolds Group’s purchase, Silgan will receive a $39.5 million break-up fee.

Reynolds Group raised its offer in the definitive agreement to $25.50 in exchange for a shorter time period to terminate the deal if Graham Packaging’s shareholders fail to approve the merger.

Shares of Graham Packaging have gone up 54.6% in the past three months. In early trade Friday shares sold at $25.17, down 2.2%. Silgan shares were up 1.5% at the latest.

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